Election lollypop: Trump’s tariffs will make drugs more expensive, not cheaper as he promised

US President-elect Donald Trump has reiterated his commitment to lowering drug prices, but his proposed sweeping tariffs could push those costs higher, disrupting both consumers and the pharmaceutical industry. Despite campaign trail promises to address rising drug prices, Trump’s proposed universal tariffs could result in higher medication costs and stymie innovation in life-saving treatments.

The price of protectionism
Trump has proposed tariffs ranging from 10% to 20% on most imports, with Chinese goods targeted at a minimum of 60% and Mexican imports facing tariffs as high as 100%. Historically, pharmaceuticals have been exempt from such measures. However, experts like Jack Zhang, director of the Trade War Lab at the University of Kansas, warn that Trump’s universal tariffs could include medications, affecting prices for critical treatments, from heart medications to over-the-counter remedies.
The U.S. currently imports around $10.2 billion worth of pharmaceuticals annually from China alone, according to the Atlantic Council. With universal tariffs, the prices of essential medications, including cancer therapies, antibiotics, and common pain relievers, would soar.

Global supply chains at risk
The pharmaceutical industry’s dependence on global supply chains could exacerbate the impact of tariffs. Over 72% of the active pharmaceutical ingredients (APIs) in the U.S. market are produced abroad, with 13% sourced from China, as reported by USP. Moreover, raw materials for many APIs originate in China, making supply chain adjustments challenging and time-consuming.
“Relocating drug production isn’t an overnight fix,” explains Mariana Socal, associate professor at the Johns Hopkins Bloomberg School of Public Health. Facilities require FDA inspections and approvals, which can take years. In the short term, the likely result is higher costs for consumers.
Even if production moves from high-tariff regions like China to lower-tariff countries such as India, experts predict no significant cost savings. Establishing domestic manufacturing capacity in the U.S. is even more expensive, adding another layer of cost that consumers would ultimately bear.

Innovation under threat
Higher tariffs could have a chilling effect on pharmaceutical research and development. Increased supply chain costs leave companies with fewer resources to invest in high-risk, high-reward therapies, including cutting-edge treatments like gene therapy.
“The additional costs will discourage speculative R&D programs,” says Dave Latshaw, CEO of BioPhy. “This will lead to a more conservative approach to innovation, with companies avoiding riskier projects.”
Moreover, tariffs could contribute to inflation, potentially prompting the Federal Reserve to raise interest rates. Higher rates historically reduce investment in emerging biotech ventures, further limiting advancements in pharmaceuticals.

Winners and losers in the tariff game
A few U.S.-based companies that have invested in domestic production capacity, such as W.R. Grace, might see some benefits. However, these gains won’t offset the widespread financial strain on consumers or the broader industry. “Even with domestic production, costs won’t come down significantly,” Latshaw notes. “Consumers will still face higher prices for the same medications.”

Balancing drug costs and economic policy
Trump’s ambitious tariff plan presents a clear dilemma: balancing economic protectionism with consumer welfare and innovation. As the pharmaceutical industry braces for potential changes, patients and policymakers alike are left questioning whether the trade-offs are worth the promised benefits.